Published on December 27, 2025 | By LoanPao Team
The Reserve Bank of India (RBI) has introduced several key updates to gold loan regulations throughout 2025 to enhance transparency, protect borrowers, and manage risks in this fast-growing segment. With gold loans reaching over ₹3 lakh crore outstanding, these changes balance financial inclusion with prudential norms.
Here are the **7 major changes** borrowers and lenders need to know as we wrap up 2025:
1. Tiered Loan-to-Value (LTV) Ratios
Replacing the flat 75% cap, RBI introduced a tiered structure:
| Loan Amount | Maximum LTV |
|---|---|
| Up to ₹2.5 lakh | 85% |
| ₹2.5 lakh to ₹5 lakh | 80% |
| Above ₹5 lakh | 75% |
Impact: Small borrowers get higher amounts against gold, promoting inclusion, while larger loans remain conservative.
2. Standardised Gold Valuation Process
Lenders must use regulated price sources (e.g., 30-day average or previous day's rate) and BIS-certified testing for purity. Borrower presence during valuation is mandatory.
Impact: Prevents undervaluation and ensures fair, consistent pricing across lenders.
3. Stricter Borrower Documentation & Ownership Proof
Borrowers must provide proof of gold ownership (bills or declaration) and identity. No loans against disputed or previously pledged gold.
Impact: Reduces fraud risks and protects genuine borrowers.
4. Limits on Bullet Repayment Loans
Bullet repayment schemes (principal + interest at end) capped at 12 months tenure.
Impact: Discourages evergreening and promotes timely repayment.
5. Transparent Auction & Collateral Release Rules
Auction surplus must return to borrower within 7 days. Pledged gold released within 7 working days of repayment, with ₹5,000 daily penalty for delays.
Impact: Stronger borrower protection against loss or delay.
6. Encouragement for Digital Processing
Digital KYC, online valuation, and disbursal promoted for faster, paperless loans.
Impact: Easier access, especially in rural/semi-urban areas like Delhi NCR outskirts.
7. Relaxed Credit Appraisal for Small Loans
No detailed income/credit checks needed for loans up to ₹2.5 lakh.
Impact: Quicker approvals for low-income or informal sector borrowers.
Additional notes: Pledge limits (e.g., max 1 kg jewellery), compensation for damaged/lost gold, and no lending for gold purchase.
Implications for Borrowers in Delhi NCR & India
These changes make gold loans more accessible for small needs while safer overall. At LoanPao, we partner with compliant lenders offering competitive rates starting @10.99% p.a. Check your eligibility instantly!